Battle flares over Gaza clearance

Palestinians walk through the rubble of what they say were homes in Rafah on Tuesday

JERUSALEM (CNN) -- Israeli bulldozers rolled into southern Gaza early Tuesday, clearing away buildings the army said were being used to launch hundreds of anti-tank weapons.

The "engineering operation" came under fire from Palestinians near Rafah which resulted in a firefight with Israeli forces.

The Israeli army said three of its soldiers were injured, one seriously, one moderately and one lightly. An unknown number of Palestinians were hurt.

The Israeli army denied Palestinian claims that the bulldozers entered Palestinian-controlled Gaza, and maintained the operation was limited to a narrow strip of Gaza under Israeli control along the border with Egypt.

Israeli bulldozers were also at work Monday at the Shuafat refugee camp near Jerusalem, 14 unfinished houses were flattened that the city of Jerusalem said were being illegally built.

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The houses were near new homes in the Jewish suburb of Pisgat Ze'ev. The Palestinians acknowledged that the houses were being built without licenses but complained that such licenses are almost impossible to get.

The developments follow more days of violence in the region.

An Israeli soldier died Monday of wounds he suffered on Monday morning when a roadside bomb exploded underneath his vehicle in the West Bank. Capt. Shalom Cohen, 22, was killed while on patrol south of Hebron. Another soldier was lightly injured.

In a separate incident, a car bomb went off Monday morning near the Kissufim crossing from Israel into Gaza, an apparent attack by a suicide bomber, an Israeli army spokesman said.

A charred body was found in the car.

Israel Radio reported that Israeli authorities had tipped off Palestinian security officials that the Gaza incident was going to occur.

Right-wing members of Israeli Prime Minister Ariel Sharon's Cabinet accused the Palestinian Authority of failing to take action to prevent "terrorist" acts.

Israeli Foreign Minister Shimon Peres said that Palestinian Authority President Yasser Arafat has told the United States he will implement a new policy aimed at thwarting "terrorism."

On Sunday night, a young Israeli girl was shot by Palestinian gunmen as a bus filled with Israeli settlers came under fire, an Israeli army spokesman said.

The shooting occurred near the Israeli settlement of Shilo, which is located north of the Palestinian West Bank town of Ramallah.

The army spokesman said the girl was in moderate condition.

Meanwhile, hundreds of Palestinians vowed revenge at the funeral of an 11-year-old Palestinian boy who was shot dead Saturday in southern Gaza.

Palestinians have said Israeli soldiers fired on the boy and at least two other children while they played.

The Israeli army could not confirm the report of the child's death, but it said soldiers did fire at Palestinian militants who had been throwing grenades at a military post. The Palestine Red Crescent Society said the child was killed at Rafah.

In the West Bank, Palestinians say Israeli soldiers sprayed cars and houses with gunfire earlier in the weekend. Israel said it was reacting to Palestinian rifle fire on a Jewish settlement.

The violence is undermining a cease-fire brokered by the U.S. last month, which is officially still in place despite Israeli and Palestinian security officials failing to agree on a timeline to implement the recommendations of the an independent, international commission to end nearly 10 months of fighting.

Palestinian eyewitnesses told the Associated Press that the children injured Saturday were shot by Israeli soldiers from a guard tower some 350 yards from where they had been playing.

The Israeli army spokesman said Palestinian militants had been shooting and throwing hand grenades and firebombs toward the military post throughout the day from inside the Rafah refugee camp, prompting the army to return fire.

In a written statement, the army said it tried to disperse the dozens of protesters with rubber bullets but also fired live ammunition in an open area that was far from the crowd.